FMG profit bounces back from floods

Rural financial services leader FMG has bounced back from last year's floods with a pre-tax profit of $20 million for the year to March 31.

That compares favourably with last year's $12.6 million before tax result, which was hit by $7.5 million of claims in the wake of the big February 2004 storm that devastated farms in the lower North Island.

FMG chief executive Gordon Smith said the result showed four years of repositioning had paid off.

"Our concentration on core business activity that we know best has enhanced our general insurance products, policy wording and service delivery," Mr Smith said.

"The strong profit result is based on a better underwriting result, stable investment return and an increase in market share and premium income."

The company increased equity in reserves by $13.8 million (22 per cent), pushing total reserves to $77.3 million.

Other highlights from the year included a 12 per cent growth in general insurance premium income, and a 5 per cent increase in total operating revenue.

Palmerston North-based FMG, formerly Farmers Mutual Group, is owned by its 35,000 farmer policyholders. It is New Zealand's largest rural insurer, with a 36 per cent market share and is a niche player in the rural Australian market.

FMG will hold its annual meeting in Dunedin on August 24.

- NZPA